Nigeria lost $1 billion to crude oil theft

The petroleum regulator announced on Friday that Nigeria lost $1 billion in income due to crude oil theft during the first quarter of this year, warning that the practice posed a danger to the economy of Africa’s largest producer.

Millions of barrels of crude oil are lost in Nigeria every year as a result of theft and vandalism, including the tapping of crude from a network of pipelines controlled by oil companies, highlighting the fact that inadequate security results in significant financial losses for the nation.

Only roughly 132 million barrels of the 141 million barrels of oil produced in the first quarter of 2022 were accepted at export ports, according to Gbenga Komolafe, the chairman of the Nigerian Upstream Petroleum Regulatory Commission.

This suggests that almost nine million barrels of crude oil were lost to theft, Komolafe said in a statement. “This translates to a loss in government income of around $1 billion… in only one quarter.”

If not stopped, this tendency poses an existential danger to the oil and gas industry and, therefore, the Nigerian economy.

According to Komolafe, daily crude oil theft rose from 103,000 barrels in 2021 to an average of 108,000 barrels in the first quarter of 2022.

The theft has led to the Bonny Oil & Gas Terminal, a pipeline transferring petroleum from the oil-rich Niger Delta to export boats, among others, declaring a state of force majeure, creating a hostile atmosphere and deterring investment.

Although Nigerian President Muhammadu Buhari has vowed to eliminate oil theft and has established special tribunals to address the issue, it still happens.

Timipre Sylva, Nigeria’s oil minister, stated last week that he anticipated some security improvements in the industry, allowing Nigeria to achieve its OPEC output limit by the end of August.

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